Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.

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The Paradox Of Chavista “Planning”: Even Simple Things Are Hard For Them

February 4, 2014

There is a paradox in Chavismo. On the one hand they plan on extremely complex and absurd laws, like the “Bill for Just Prices”, but on the other, they can not even hold the first of the “weekly” Sicad auctions for US$ 220 million.

And indeed, fourteen days ago Minister of Energy and Oil and Vice-President for Economic Affars Rafael Ramirez held a press conference (above) and with a straight face told us about a “planned” foreign exchange budget and “new and improved” and weekly Sicad auctions in the amount of US$ 220 million.

And a paralyzed country was eagerly awaiting for this auction for many reasons. For one, everyone was wondering whether the Sicad rate would slide down or not and by how much. But more importantly, after fourteen days (really all of 2014), people just wanted the “weekly” Sicad auctions to become regular, because only certain economic groups were included in the first auction. The sooner we could get over the first one, the sooner we could find out who would be included in the second or third auction.

Thus, a simple “auction” (it is not an auction, it is an even much simpler sale of dollars) is cancelled by the same Government that just created a Superintendency to calculate and establish the “just” price for every goddamn single good and service in the whole country.

But somehow, the same Government can not even organize the SIXTEENTH Sicad auction, where the only “novelty” is that the amount to be sold is twice as much as the previous fifteen ones.

It is the Paradox of Chavismo, they have not been able to run anything properly in fifteen years (twenty for that matter, their coup failed) but they keep coming up with ever complex bills and structures to regulate the economy.

The first three weeks of 1994 saw 334 events of Chagas disease? How can that possibly be? I was under the assumption that there were thousands of Cuban doctors in Venezuela. What are they doing there, nothing?

I quite frankly had never heard of Chagas disease, so I looked it up, and to say I was shocked is an understatement.

Can I assume that El Universal is one of those newspapers that are finding it impossible to find newsprint and ink? ‘Cause if the people have no idea of this disgrace then it’s never really happening, right?

I have come to the conclusion that in fact, Maduro is a genius at combating inflation. INFLATION CANNOT HAPPEN IF THERE IS ABSOLUTELY NOTHING TO SELL! Yes, if there is noting on any shelf, any auto lot, any produce stand, then prices cannot go up.

Following up on the thought that there’s nothing to sell…overheard a skype call with a grandmother living in caracas..I was surprised at the anger with the government not over politics but hunger..apparently their whole building is hitting the strrets next week..the theme I heard repeated is..were hungry and there’s nothing to buy…and we’ll stay on the street until the goivt is gone…rhetoric or maybe the start of something that goes beyond political opinion…I’ll be interested to see how this plays out.but seems the focus is hard to argue with chavista or not.

FOR IMMEDIATE RELEASE
Ninth Annual CITGO-Venezuela Heating Oil Program to Warm Thousands of Families During Cold Winter Months
Boston – Feb. 5, 2014 – CITGO Petroleum Corporation and Citizens Energy Corporation are pleased to announce the launch of the ninth annual CITGO-Venezuela Heating Oil Program today. The CITGO-Venezuela Heating Oil Program, the only of its kind in the United States, has donated more than 235 million gallons of heating oil to more than 1.8 million people since 2005. As in previous years, this program will assist families, homeless shelters, and Native American tribes in 25 states and the District of Columbia.

According to the National Energy Assistance Directors’ Association, this year nearly seven million US households will need heating assistance. The typical heating oil customer who lives in the Northeast is expected to spend more than $2,000 on fuel this winter, up 35 percent from the winter of 2008-2009. Families living in older homes will spend as much as $4,000 to keep the house warm.

“We have committed to this program once again this year because we see it as a humanitarian effort that helps our most vulnerable neighbors stay warm during one of the coldest winters in history,” said Nelson P. Martinez, President and CEO of CITGO Petroleum Corporation. “We can’t relieve the need for everyone but this is our humble contribution to share the responsibility of improving the quality of life in our communities by using the strength of our resources to help those in need. This is one of the most important values we share with our shareholder, Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela,” he added.

The CITGO-Venezuela Heating Oil Program began as a single donation in response to the skyrocketing price of heating oil in the aftermath of hurricanes Katrina and Rita. Ever since, CITGO has dedicated itself to providing vital energy assistance for those who are forced to make the choice between purchasing vital necessities like food and medicine and heating their homes.

Since the first year of the heating oil program, CITGO has partnered with Citizens Energy Corporation, a non-profit created in 1979 by former U.S. Rep. Joseph P. Kennedy II, to deliver the fuel. Citizens Energy Corporation, which has used successful ventures in the energy and health care industries to finance charitable programs in the U.S. and abroad, has provided energy assistance to families in need for more than 30 years.

“The poor are facing a terrible hardship this winter,” said Kennedy. “Federal fuel assistance has dropped 40 percent over the last few years while heating oil prices have jumped by a third. With the kind of cold we’ve experienced this winter, the federal aid just doesn’t go as far. It’s a triple whammy on the poor. That’s why the generosity of CITGO Petroleum and the people of Venezuela is so important – it helps fill the fuel gap for the most vulnerable among us.”

The Venezuelan Vice Minister of Foreign Affairs for North America, Claudia Salerno Caldera, who attended last year’s launch of the program, expressed the support of the Venezuelan government again this year. “Helping the poor is a humanitarian principle that is inherently tied to responsible energy policy in the Bolivarian Republic of Venezuela and one that transcends geographical boundaries,” she said. “President Chávez promoted this program in response to a request for humanitarian aid at a time of high fuel prices. President Maduro has ratified this support, so that the program will continue to warm US homes as a sign of solidarity between the peoples of Venezuela and the United States.”

Families struggling to pay for home heating oil can call Citizens Energy Corporation at 1-877-563-4645), to see if they are eligible for heating oil assistance. Once approved, the household will receive an authorization letter with details for arranging a one-time delivery of up to 100 free gallons of oil.

CITGO, based in Houston, is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petróleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela. For more information visit http://www.citgo.com

So, lemme see if I got this right. Hundreds, perhaps thousands, of Venezuelans are suffering from an outbreak of Chagas Disease, amongst many other medical calamities, because of a lack of basic medical supplies in Venezuela,….. whilst a loopy and starry-eyed RFK jr. is celebrating an influx of scarce Venezuelan funds for heating oil? Right.

well here in Canada, we’re having trouble meeting our 2% inflation target (best we can do is a bit over 1%) and having shipped of our last banking chief Mark Carney to head the Bank of England, wondering if we could make a trade for Ramirez..ok we’d like an option on Merentes as well….to help us kick start some inflation…an area where we need some expertise

Sounds like a deal to me! By the way, could you also check to see whether or not there are any current ‘entry level’ bus driver positions available in, oh, …say,…Yellowknife as well? We have a candidate who may be looking for a new job very shortly…..

[…] as an economic basket case insults baskets everywhere. The economy is massively controlled, yet planning is a big mystery to Government officials. The Bolivar has been devalued officially, again, as […]

OK, but why ultimately?
“Banks in Venezuela do little between themselves, not like in many parts of the world.”
What is the motivation for banks elsewhere to be dealing with each others’ money? Simply another form or forms of speculation?

That is what M3 is M2 plus large time deposits within the financial system, which in Venezuela are not relevant. Financial instruments are different in different countries, so ar the way banks work, Banks in Venezuela do little between themsleves, not like in many parts of the world.

M3 is defined different in different countries and regions. And yet: one thing that called my attention is how M3 is almost the same as M2 in Venezuela, whereas the difference in the EU is quite clear.
According to the BCV excel sheets, M3 has in addition mostly the “cédulas hipotecarias”, which are hardly anything worth reporting. Why?

The easiest way voor rich chavistas to expant their capital is to rise the black market rate. Their purchase power rises 20% every month by doing nothing. The only thing they have to do is invent tricks like this new ‘fair prices’ law or postpone the auction and the black market response in their favor. Great way to gets richer and fool the people that you are doing it for them. Two fat birds with one stone. (imagine what they say behind closed doors, they even fooled the chinese!) They will keep doing that, offcourse, untill somebody will stop them. But somehow venezuelan people don’t see what the rest of the world sees. Or they dont want to see it because they realize that they are fools for 15 years in a row, and nobody want that.

We tend to forget that all of this economic stupidity is being played-out on a world stage. Everyone knows. It’s in the world press/media every single day. Just imagine what the Chinese government must be saying behind closed doors. We lent these numb-skulls our money? And last year they came back here to Beijing to beg for more? Wow.

It’s getting worse. Today, under the “Just Prices” law, carnicerias in Catia/Vista Alegre were visited and forced to sell chicken at Bs.15/kg. that they had bought from wholesalers/producers at Bs. 50/kg.; and these wholesalers/producers, as well as those of other goods nationwide, are being threatened with fines/imprisonment/closure if they don’t lower their prices well below real production costs starting next Monday!

Miguel, when people go crazy, they go to a psychologist or a psychiatrist for treatment. When countries go broke they go to the International Monetary Fund or the World Bank to get their act together. In all cases, there is an admission that there is a problem. The Venezuelan Government is out of control, they do not admit it. Collapse and rebuild seems the only way out.

Yea, Did all participants present “anomalies” and “lack of compliance with norms”, or just the ones that government wanted to assign Dollars to ?

Of particular interest is the case of newspaper El Impulso, in Barquisimeto. This newspaper, because Cadivi won´t give them Dollars at 6,30, went to this auction and pay for newsprint paper at Sicad rate even though the newspaper would have to be more expensive for consumers and adverisers, but at least they are not letting the paper die for lack of paper.

BTW this publication just celebrated 110 years of existane and has never been out of print through 100 years of all kind of governments and regemes until this one.